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You are not going to want to miss what Nashville has in
store. Bitcoiners, welcome back to
another episode of Bitcoin Magazine Podcast.
I am joined today by the two cofounders of LIPA, Patrick and
Bastian. Really looking forward to
talking about their Lightning wallet and the services that
they provide. So I'll be joined by them right
now by. Patrick and Bashin, welcome to
the show. Thanks for having you guys.
So you guys are a company based at Switzerland.
You guys obviously are the cofounders of LIPA.
So for our audience, if you guys just want to give a brief
overview, maybe we'll start with you, Patrick, of what LIPA is,
what services you provide and then anything you want to share
about your business. So nice to meet you all.
I'm Patrick. I'm the CEO and one of three
cofounders at LIPA. And yeah, we are a Bitcoin
company, obviously, and our vision is accessible financial
freedom. And what this exactly means is
we want to make it very easy for people, not only bitcoiners, to
use Bitcoin as a means of payment, as a means of exchange.
And therefore, of course we are using Lightning, that's an
obvious one. And we're working on the past is
we were working on a business, a vote for business, so businesses
can actually receive payments. And as a as the next logical
step for us was we want to. Enable not only businesses but
also everyone else to use kind of the payment.
So we were working on aligning wallet the last year and we just
released it in June and currently we're focusing on
improving this one. And yeah, that will be the short
version of who we are. Yeah, definitely.
Bastion. Anything you want to add to
that? Now we expect it very well.
It's just in my regards, I am the CIO of LIPA.
And as Patrick already said, we have a third person again which
is the CTO, which is like another part of the team.
Definitely awesome. Yeah.
I think it's very important. I think using.
I know Matt Odell's a good friend of mine, he always says
privacy is not secrecy, but privacy is what you selectively
decide to reveal to the world or and I think that's very
important. I know he highlights the fact
that using Bitcoin privately is a way to keep yourself
sovereignty and to keep your freedom, basically because if
everyone knows everything that. Are doing.
Whether it's governments or large, large corporations,
obviously you can be controlled because of the lack of privacy,
so obviously privacy is very near and dear to my heart, but
I'd love to hear how you guys have improved privacy.
Obviously, many people say sending Bitcoin privately via
lightning. Is very good, but receiving it
can be a challenge at times. That docs is your IP address or
just what you're using. So I'd love to hear either
Bashing or Patrick, Either one of you can take this of how do
you use Bitcoin more privately with the service or the wallet
that you have. Yes, as Patrick already said, we
are currently implementing the non custodian lightning wallet
and with that we take a part of the, we take the part of the
LSP. So we do lightning service
provider in that terms that we open and or managing basically
tenants like Phoenix does for our users.
What we have thought about is there's always pathfinding
involved if it wants to send funds or receive funds.
Basically when it wants to send funds.
What Phoenix does is basically does trumping routing.
Means Phoenix does all the does all the routing.
The path finding for the wallet and then returns the information
to the wallet and sends it off. What deeper does is we use the
rapid gossips and protocol. So we have our own watchdog on
the rapid gossip protocol and with that we crunch it.
We crunch all the network topology in one and send it to
the phone so the phone and the wallet lighting wallet on the
phone can do its own path finding.
So yes, we have. Information about how much funds
go back and forth, because we're handling the channels we have
view onto the balance of the channel, but we never know where
to send it or where the funds were sent or where the funds
come from. Yeah, that's fascinating.
I guess my question is, it's very interesting.
Obviously you're running a non custodial wallet.
That's my preferred method of choice.
But for someone or business or individuals setting it up, do
they use their own node or is this something that you provide?
Or is there an option to do it not custodial with your node or
not custodial with their own node?
I'd love your thoughts on that. So currently as we just started,
Patrick said, we launched the application in June that was
like to the equation of the BTC park, we announced our public
beta. And with that, we are in a very
early stage with the application.
So for now, Lepo provides as the LSP provides the channel opening
and provides the inbound liquidity channels to the node.
OK. Yeah, that's really fascinating.
So I guess as of right now, you guys have said on your website
that you have obviously the option or you're an LSP for
individuals and businesses as of right now.
I guess maybe to you, Patrick, is that an option right now or
were the two different buckets for providing an LSP service to
personal or businesses? Yeah, first step, obviously we
are the LSP for our own wallet, which is the consumer faced
wallet. Before we were working with
businesses, everything was a little bit easier because we
were running 1 central note for the businesses.
But of course our vision is not to stop there and go further.
The next logical steps in our that we will open up the LSP in
the future that other companies can use it.
That is 1111 logical step. But the other one is also what
we want to implement in our wallet is that you can actually
choose your own. LSP, so you can choose whatever
lightning service you want to use, You can choose for example
breezes, LSP or whoever's. So that's the vision for the
future. This will also, yeah increase
first of all the privacy aspect, but also it will increase the
flexibility and also the the being able to send funds if one
of those LSP might go down or yeah, gets regulated out.
Yeah, now that that makes sense. I know historically it's very,
it's been very difficult for Bitcoin wallets in order to be
profitable. We've seen just in years past
normally it seems like probably the most successful model aside
from being an exchange that has your own wallet.
Obviously they make money on the exchange and then using the
wallet as a loss leader or or basically offering coin join
implementations in your in your business model.
Do you see it providing LSP services as a way to become
profitable or coin joins or maybe opening up an exchange or
a way to buy a spot Bitcoin? I'd love your thoughts on.
Patrick. Yeah.
So what we are working currently or what they're working on
currently is an exchange integration.
It's not our own exchange. We work with a partner, but it
will be directly into Lightning. So this is the next release
we're going to do. A big feature release is going
to be you can buy from Fiat directly into Lightning in the
whole in Switzerland and whole Europe, basically not every
country, but most countries. This is step one.
So, yeah, of course this can be profitable, but it's only one
one part. What we are looking into mostly
is actually additional features to the wallet that could be
monetized. Yeah, one, one example would be
that you could have a different use of Ellen address.
Ellen address itself. Yeah, very simple.
It's a simple technology built on lightning.
But of course we could implement something like you can send
funds to a phone number. And this can be in another
country and there we could charge a little bit because of
course we will have to deal with regulation and all of that.
But I think, yeah, additional feature on top of standard
Lightning is the most logical place to monetize a business.
Yeah, no, that makes sense. Speaking of like a dit,
additional features and stuff. Recently Dusty Damon announced
splicing, or at least he announced it last year at
Bitcoin 2022 and showed it. But really, we've seen the first
implementation with it at Async or Phoenix while implementing
splicing into the beta form. Is this something that you guys
are excited for with your wallet and being an LSP provider for
basically just in time liquidity of lightning and Sacs being able
to change channels or splice channels in and out to make them
bigger? Maybe I can toss that over to
you bash and what are your thoughts on splicing and its
implementation with with you guys?
Yes, splicing is definitely a good thing when it comes to to
channel management. For now it's we always have two
Bitcoin on chain transactions to open and close the channel.
And if we could use splicing for liquidity management within the
channel, this would be a huge thing for us.
As far as I know currently just Eclair has this feature and
unfortunately currently we do not run on Eclair.
So our back end is L&D based, but we are hoping and see and
hopefully see a splicing with L&D as well.
Yeah, and I know L&D and both core Lightning are trying to
implement splicing. It just seems that Async and the
Eclair team beat them to that. Are there any other features
that you guys are really excited for on Lightning or things that
you're looking forward to? I know BOLT 12 normally comes to
mind. This is something that's been on
the docket for for many years and I know these things don't
happen overnight for sure. But I guess any thoughts,
Patrick or Bashin, about like future features that you're
looking forward to on Lightning? Personally, I'm really.
Looking forward to the day when this will be possible because it
can be a challenge. We love that many companies are
working on self custodial wallets but receiving funds it's
just a pain if you need to be online at any time.
So your phone basically when this is the place where your
node is running. It needs to be online and the
north needs to be running and this is a big challenge with
also the restrictions on my mobile phones and yeah, async
payments. Enlightening.
I think it will be a game changer because for the general
audience this will be much more logical.
I can just send funds to Bastian Bastion, for example, without
asking him to be online. This is for me, is going to be
great. So, yeah, looking forward to
that. Yeah.
Anything you're looking forward to?
I'm really looking forward to top route key splicing or key
distributing key show over different areas is definitely a
point for us when it comes to node security.
This is one thing I'm really looking forward to and as
Patrick said, both 12 us something which I think is some
kind of a next level. We have Ln URL, we have lighting
addresses, but for me it's just a workaround.
Because it brings a custodian into a system which should be
non custodian. Yeah, definitely.
I guess I know that there was a lot of controversy at Bitcoin
2023, the year that just happened with Barack mentioning
ARC, and I know that this is something that's not fully
fleshed out. I know it's a competing layer
two. I know I've seen many of the
Lightning companies saying why don't we fix the things we
currently have versus making a new implementation on layer two.
What are your thoughts on ARC? Have you guys looked into it at
all? Do you think this is not Fudd
but competition to Lightning, or do you think they can?
It coexists. So I love your thoughts either
Patrick or fashion on that. Generally speaking, I love
competition and I love innovation.
When I look at other implementations, I think it's
great to look into it. At least.
I'm not sure if it's really the right way to go, if it will be
the same level as Lightning or even better.
But generally speaking, I love when there are several
technologies dealing with the same problem.
Then we can find out which one is actually really the.
The right way to go in the long term and which one really solves
the problems that we have. So yeah, that's my general
answer to that. It could be to any technology.
Sorry for that. Yeah, no, definitely passion.
Any thoughts on that as well? Yes, I'm listening to a lot of
podcasts and ARC was topic of many podcasts and from what I
understood is that ARC solves the liquidity problem or the
tenant opening problem. With a coin, a Bitcoin chain
transaction every five seconds. And so with this it does a coin
join and so on. It brings in more a little bit
more privacy. Yes, enough, but I think a layer
two should really get the heat of a base layer.
And with that I think Lightning for now and for me is the better
way. But it might be that I didn't
fully understand ARC and where the real benefits here are.
Yeah, definitely. So I would be remiss if I didn't
bring up regulations. So obviously guys are based in
Switzerland, correct me if I'm wrong, the Switzerland is not
part of the EU, is that correct? Correct.
I know the EU has been trying to clamp down on payments.
It seems like they'd love to push their own CBDC similar to
what China and India have tried to roll out, even Nigeria as
well. So I guess you guys fall in this
weird spot because I associated you guys with the EU, but
obviously under a different regulations and jurisdictions.
What is it like been trying to provide I'm assuming?
Customer support, not just for Swiss customers, but people in
the EU and even selfishly someone being in the US.
I guess what it's like, would you guys future plans to help US
based customers as well or are you going to stick to
Switzerland, the EU and and what have been the conflicting
problems with regulations across basically three different
jurisdictions, if not Asia as well added into the mix?
Patrick, I'll go with you first. Our first talk of course is
Switzerland. It's the easiest for us and it's
about regulation. It's we know it, we are here and
we, yeah, it's our home, but we are not only working in
Switzerland, but also in in Europe.
We are actually allowed to operate in, or at least before
me come, we are allowed to work in European countries when we
are regulated in Switzerland. You can see other companies like
Pocket Bitcoin for example. Or relay the exchanges that are
also working in other countries in in Europe route of
Switzerland, this is totally fine, but with Nico there will
be a lot of changes that we know already, but there's a lot of
things that are also fully unclear.
So it's very, very hard to say what exactly will be the impact,
but it definitely will have impact on also Swiss companies
and we most likely will have to open a subsidiary in European
country. For European Union country and
we will have to get regulated by NICA.
But until this is fully in in implemented, everything stays as
before. As you can see there is many
companies from Switzerland, companies working in European
Union. You also asked about US.
It's not if we don't focus, we will kill ourselves as a
startup. It's for example.
We had to learn this also very hard already in the past as as
LIPA, but also before we even were named LIPA.
We are working together for about 3 years, the three of us 3
cofounders. And yeah, focus is the more main
thing that we need to look into it in the first years.
And that's why we focus on Europe.
Of course, we would love to be in other countries like the US,
but also like Nigeria and other hotspots.
But yeah, looking at all them, it will distract us from
delivering a great wallet. And great wallet is what we are
focusing on at the moment and delivering this to at least
Europe, yes. Yeah, that makes sense.
Yeah, I hate to keep on the regulatory framework, but I know
I've heard of Mika and I didn't know when it was gonna be
implemented, what year or what month.
And then also if you can give a brief breakdown of what Mika
could do, not just for your business, for Lightning or
Bitcoin businesses in general, if you can give me a breakdown,
Patrick, that would be great. If I was able to give you a
breakdown, I will be the probably the only one in whole
Europe who can do this, but that's my personal view on it
without makeup. We had a Gray area around a lot
of services in crypto and Bitcoin.
Of course they don't tackle Bitcoin specifically, but
actually crypto. But what it will do is
definitely make some things more clear.
If they will really help us, that's to be investigated.
But what could happen in my eyes is that Bitcoin, and
unfortunately the crypto, becomes even more accepted by
the general public. And this of course can help us
tremendously. What on the other side will
happen is it will make. Our life much more expensive.
All the companies working in Europe, we will have to deal
with this paperwork. We will have to hire lawyers to
to look into all the details and this will be quite cost
intensive and also very slow process.
I heard the numbers from one to two years until this can be
implemented and this is just not supporting a lot of the
innovation in the whole space. But generally speaking, I think
it could make things a bit easier long term.
Thinking about having or knowing what where are we are at and
what is the rule and what not. Yeah, if there's one thing I've
learned being in the working world for a few years here now,
is that lawyers always seem to get paid at the end of the day,
with any company you know, any regulation, any ruling, any
lawsuit, it seems to be the lawyers, the ones that makes out
the bandit, not the companies, the dealing with these issues.
Getting off the regulatory topic because you know you'll drive
anyone mad by listening to it and obviously Bitcoin tries to
be outside of or lives within it, but outside of the confines
of the state. I guess what things are you
excited for LIPA and things that you're bringing forward?
Anything that you want to bring up as we begin to close this
interview here? Anything Bastion or Patrick you
guys want to bring up? Bastion, you want to go first
or? No, go first, Patrick.
It's a long list I have to think, but I'm excited for now.
I'm first of all excited that for LIPA that we will have our
wallet on Android as well soon in a better.
What I'm super excited about is that we have exchange
implemented soon we will be able to see how it's going with on
ramp directly from Fiat to lightning.
What I'm also excited about is yeah, following the whole
development and hopefully having we were mentioning what we would
love to see enlightening, right? And I really hope that one or
two of those will be even close to to to reality this year.
Because yeah, some features like sending money to a phone number
or sending money across borders will be much easier if if we
could do it without being a custodian in the middle with
Ellen address. And yes, I'm really looking
forward in such features. And what I'm also looking
forward to is, yeah, getting more feedback on our wallet.
I know that there's worldwide a lot more people are looking into
Android app and we started with iOS.
And yeah, I'm really curious how this is going to go and where we
will go with all the feedbacks, yeah.
Definitely fashion anything you're looking forward to on the
road map with LIPA. Yeah, for sure.
We we live and breathe LIPA now. For me, the most exciting part
is definitely as I'm more tech, the LSP part.
There are so many. Obstacles.
There are so many uncertainties at the moment within the time
frame. We already managed to build an
LSP and already running it, but still we have still some some
obstacles to overcome. This is probably one of the most
exciting stuff for me. And yeah for sure, I really love
to see a non custodian lightning wallet or non custodian wallet
on the market which is very user friendly and even knock on is.
Or normal people like I love to call them models to use this
application and to send and be able to enter into the Bitcoin
word, probably without even knowing using Bitcoin.
Yeah, definitely. I guess I had one more question
before we begin the wrap up here.
As you guys are running your own LSP, would you potentially help
other exchanges if you're not already to implement Lightning?
I know many exchanges call by the wayside and don't have
Lightning implemented. I can only think of a handful
that have. Really only implemented them
within the last year, but helping it like exchanges
implement lightning and this is something that's new to them.
I know many exchanges unfortunately are crypto
exchanges in my opinion. So they have other coins and
they are not incentivized to implement lightning because it
maybe kill some of the altcoin narratives that they try and
push. But would you try and help
exchanges implement Lightning as an LSP or is that some a service
that you guys are planning to provide in the future for
exchanges? Maybe I'll kick that over to you
Patrick. Yeah, looking at that, I think
what I it's bringing me back to the what I experienced in the
Bitcoin space since I am working in a Bitcoin startup and it's
amazing the help that we were given by different companies and
also how much we were already able to contribute.
I just talked to some engineers recently from LIPA and they were
really excited about being able to contribute so much to to the
community. I just yeah delivering some code
or helping with discussions and I I think it's totally our
spirit at LIPA to to support. We are also in contact in
Switzerland with the exchanges we work with one who is enabling
themselves basically. But we are very happy to support
when there is need for support and when there is actually the
will to implement lightning. As you said, not all the
exchanges are really looking into this, but if an exchange is
looking into it, you're very happy to support.
Yeah, that's awesome Bastion. Anything you want to add?
Maybe on the back end is what are the technical difficulties?
I'm sure there are many of integrating LSP into exchanges
for the back end. I mean lightning is not an easy
topic, it is from the get go. It's very complicated to have
all everything implemented, everything in place to have
working liquidity management. You have a working node
management and so on. And this is an exchange is
usually just sending. He has the liquidity and sends
it out to someone else and as Karken or I think Biden started
it as well now they were working for quite a long time of it.
So I think if we can help, I think just ask and we will see
how we can help. Yeah, definitely.
So I guess that's pretty much all the questions that I have
for you guys right now. Is there any questions that you
have for me or anything that you want to highlight before we wrap
up here? No, except that I'm really happy
to see not only our wallet developing, of course, we have
to focus on that, but I'm really happy as you as we had in the
discussion before, there is so much innovation going on with
splicing with, with a long list of different features coming
from different companies. And I think, yeah, it's amazing
to see what's going and I'm very happy that there's not just one
wallet, but actually a bunch of them that are now also developed
that are self custodial. I'm really happy to see what's
going on in the space and I'm super hyped and excited and
yeah. That's awesome.
Any final words fashion that you want to add there as well?
Yes, and LIPA Wallet just came out and we're still looking for
feedback. We set up a web page have LIPA
Swiss where you can give feedback, go download it from
the test flight in the Apple store.
The link is on our website as well.
So try it out, use it, give us feedback.
That would be awesome. All right.
Thanks so much, guys. It's been a pleasure talking to
you both. Patrick and Bashin, thank you so
much for coming on. For everyone that was listening
to the Bitcoin Magazine podcast, thank you so much for listening.
Make sure to go get your tickets to Bitcoin Amsterdam or Bitcoin
at 2024. You can use the code BM live to
get 10% off. You can also use the code BM
live inside the Bitcoin Magazine store to get 10% off items in
the store. Thank you so much guys for
listening and hopefully we'll talk to you guys again soon.
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